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On the aggregation of health status measures
Jens Leth Hougaard1, Hans Keiding
1Institute of Economics, University of Copenhagen, Studiestraede 6, DK-1455 Copenhagen K, Denmark.
Abstract:
In the present paper, we address the problem of finding conditions under which aggregation of individual health status measurements (e.g. QALYs) is meaningful in the sense that there is a universal unit of measurement for health. The problem is studied in a model where different aspects of health take the form of Lancasterian characteristics to be produced by the individuals using commodities obtained in the market. For a meaningful unit of measurement to exist, marginal rates of substitution between different aspects of health should not differ among individuals, and for this to happen in an equilibrium of the economy considered, certain assumptions of separability (of technology and/or preferences) must be satisfied. This means that universal measures of health will be meaningful only if there are not too many spillovers in achieving different aspects of health.
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